That came after Musk voiced similar thoughts on Twitter merely an hour earlier, writing: "Am considering taking Tesla private at $420". It's not uncommon for trading in a stock to be halted in the wake of unexpected or unsettling news. (Musk said in his Tesla blog post that he held a 20 percent stake.) He said that if the plan goes forward, shareholders would cast the deciding vote.
He also said he intends to give Tesla's existing shareholders the option of retaining a stake in the company through a special fund.
Galileo Russell, founder of HyperChange TV and an outspoken supporter of Musk and Tesla, said in an interview on Cheddar he doesn't want to sell his shares. On the other hand, many of Tesla's most passionate backers bought stock because they believe the price will eventually go to stratospheric levels.
Gene Munster of Loup Ventures, said Tuesday that Musk's tweet could fall within the guidelines of the SEC as long as investors have been alerted. He also noted that going private would avoid stock shorting attempts to harm the company. In the past year alone, Tesla shares have seen a wild swing, trading as low as $244.59 last April to reaching its all-time high less than six months later amid upbeat Model 3 sentiment.
Initial evidence indications that Tesla did not immediately respond when the PIF's initially expressed interest to CEO Elon Musk.
Also on August 7, the Financial Times reported that the Public Investment Fund, Saudi Arabia's sovereign wealth fund, had built a $2 billion stake in the electric-car maker this year. The stock rallied 11% on the day, burning short sellers, who Musk has publicly blasted, to the tune of $1.32 billion per S3 Partners and sending many investors scrambling.
Tesla CEO Elon Musk, in true Elon Musk fashion, took to Twitter to think out loud about his electric auto business.
Tesla has been public since it filed an IPO in 2010.
Tuesday's gains following the tweet added to upward movement on the stock after The Financial Times reported earlier Tuesday that a Saudi Arabian sovereign wealth fund had built a stake of between three and five percent in the company. "Funding secured, ' Musk tweeted, following up with 'good morning" and a smiley emoji. The company had a market value of $58 billion as of Monday's close.
Musk's tweet isn't a clear violation of SEC rules, but it could be if it was explicitly meant to boost Tesla's price.
The plan would need shareholder approval, but Musk's tweet sent Tesla stock spiking by nearly 9%.
The stock was halted at $367 a share shortly after 2 p.m. (ET), as some grew concerned that Musk's tweets were an attempt at market manipulation.
But the market appeared to take him seriously with Tesla shares surging on the news.
"Once Tesla enters a phase of slower, more-predictable growth, it will likely make sense to return to the public markets", he wrote.